H-1B reforms proposed by the AFL-CIO and the Communications Workers of America

Prepared by the Department for Professional Employees, AFL-CIO, in coordination with the  Communications Workers of America and numerous other international unions.  

Proposed Changes for H-1B Labor Certification Program

1. Labor Market Conditions 

Government Studies:
"The program does not currently protect U.S. workers' jobs; instead, it allows aliens to immigrate based on their attachment to a specific job and then shop their services in competition with equally or more qualified U.S. workers without regard to prevailing wage." [1]

"DOL's Permanent Labor Certification Program does not meet its intent of excluding foreign workers when qualified, willing U.S. workers are available...Despite a costly, time-consuming recruitment process, the required labor market test did not result in the hiring of U.S. workers over foreign labor." [1]

"..the current size of the H-1B workforce relative to the overall number of IT professionals is large enough to keep wages from rising as fast as might be expected in a tight labor...(there is) no analytical basis on which to set the proper level of H-1B visas, and that decisions to reduce or increase the cap on such visas are fundamentally political." [5]

Possible Reforms:

• Devise labor market test that ties visa approval to local labor market conditions.
• Reduce number of available H-1B visas from current level of 195,000 per annum to 1998 level of 65,000
• Eliminate exemption for educational institutions.
• Condition employer eligibility to petition for H-1B visas on their ability to demonstrate that, over the previous year, they
  1. increased the number of full time equivalent U.S. workers;
  2. increased the total amount of wages paid to their U.S. workers, and;
  3. increased the average wages paid to their American workers.
• Impose more meaningful/verifiable requirements that all H-1B employers (not just H-1B impacted) make good faith efforts to recruit in the U.S. and that they have not laid off workers to make room for guest workers.
• Limit number of guest workers in any one firm, to a set percentage of the firm's workforce.

2. "Temporary" Program

Current Problem:
H-1B guest workers can stay in the U.S. for at least six years (two, three year renewable visa terms); longer if their paperwork to transition them to green card status is in the DOL pipeline. A program of six years duration does not qualify as "temporary."

Possible Reforms:
Restrict this "temporary" guest worker program to one, two or three year (non-renewable) term.

3. Prevailing Wage Determination

Current problem:
The so-called "prevailing wage determination process", which is not subject to DOL rate setting and may or may not be based on a bona fide locally calculated wage rates, provides employers with the ability to in effect set their own rates and pay far lower than the actual prevailing wage for a given professional occupation.

Government Studies:
"There is no certainty that U.S. workers' wages are protected by the LCA [Labor Condition Application] program's requirement that employers pay aliens the higher of the prevailing wage or actual wage paid to their employees who are similarly employed." [1]

"WHD (DOL's Wage and Hour Division) is significantly more likely to find violations in H-1bB (back wage) complaints than in complaint cases under other (wage and hour)....over the last four and a half years, 83% of the closed H-1B investigations found violations-compared to about 40 to 60 percent under other labor laws" [4]

"The Labor Condition Application Program is being manipulated beyond its intent of providing employers the best and brightest in the international labor market while protecting the wage levels of U.S. workers." [1]

For 75% of all cases where the non-immigrant worked for the petitioning employer, the employer did not adequately document that the wage level specified on the LCA was the correct wage. In their review of LCAs, the DOL regional Certifying Officers do not verify or question if a public file [on the method of determining the wage and the impact of the wage rate on similar workers] actually exists. 8 U.S.C. 1182(n)(1) does not give them the authority to do so. [1]

Even where the employer adequately documented the wage paid, 19% of the aliens were paid less than the wage specified on the LCA. [1]

Possible Reforms:

• Employers petitioning for H-1B workers must pay the higher of:
  1. the prevailing wage as determined by the state workforce agency (SWA); or
  2. a prevailing wage that is no less than the median salary for U.S. professional workers. (This will help assure that these guest workers will be paid a minimally appropriate salary commensurate with the highly prized and difficult-to-find skills that they allegedly possess).
• In order to better keep track of H-1B workers and insure that they are paid the appropriate pay, employers should be required to file a copy of the workers' yearly W-2 form with the DOL/INS.
• Assure the payment of all benefits available to the petitioning employer's other employees are also paid to the H-1B worker(s).

4. Lay-off protections

Current Problem:
So-called safeguards to prevent employers from laying off U.S. workers and hiring H-1Bs are ineffective and limited to the employer's actions over a 90 day period prior to the hiring of the H-1B.

Possible Reforms:

• Apply anti-layoff protections to all H-1B employers.
• Extend no-layoff protections from ninety days to six months for all H-1B employers.
• Laid-off H-1B workers must return to their country of origin within 60 days of their unemployment; prevent the misuse of the "portability" of H-1B visas so that they are not used by the guest worker to look for other employment.

5. Employer attestations

Current Problem:
Employer attestations regarding their so-called "good faith" efforts to recruit U.S. workers are laughable. Employers establish qualifications and skills sets that are most often tailored to a specific guest worker. Attestations regarding the payment of the prevailing wage are equally insufficient.

Government Studies:
"Employers specifically tailor advertised job requirements to aliens' qualifications. The jobs' education and experience requirements were based on the aliens' qualifications, not on the skills required to perform the work." [1]

"The special requirements identified on the application appear to be customized to fit the alien's qualifications rather than represent actual job requirements. This appears to be restrictive criteria to eliminate qualified U.S. workers." [1] Degree requirements

Possible Reforms:

• Eliminate and replace attestation process

6. Degree Requirements

Current Problem:
H-1Bs are supposed to be highly skilled professionals with the requisite academic degree. But even this standard is undercut by language that allows a vague degree equivalency, such as work experience, to suffice. In addition there is no system in place to verify that those with degrees have valid credentials or that they are equivalent to a U.S. degree.

Congressional Testimony:
Accusations that H-1B applicants falsify job experience and education were confirmed by Jacquelyn Williams-Bridgers, State Dept. Inspector General, who said that attempts to falsify, alter, or counterfeit U.S. visas or passports and attempting to obtain false documents to obtain visas is a "constant problem both within the U.S. and overseas." [2]

Jill Esposito, State Dept. Post Liaison Division, Visa Office, Bureau of Consular Affairs, backed up Yates' statement that documents are routinely falsified. She said that, although many foreign workers in the U.S. on nonimmigrant visas are here legally and properly, there are "thousands of marginally qualified applicants (who) are also entering the United States in the H-1B and L-1 categories." [2]

Ms. Esposito also detailed a year-long joint INS and Department of State initiative which focused on the American Consulate in Chennai, India, which issued more than 20,000 H-1B visas in Fiscal Year 1998 -- more than any overseas post. The investigation found that 45 percent of the 3,247 work experience claims made to the INS were fraudulent. [2]

Possible Reforms:

• Current law allows H-1B applicants to have a college degree or the "equivalent". This sets a highly subjective standard that is most difficult to apply and often abused. Work experience should not be a substitute for the required academic credentials. This vaguely-worded equivalency standard should be eliminated.
• Assure that the H-1B worker has an degree in the field/discipline for which he/she is being hired.
• At present there is no procedure in place for checking on the validity of a college degree cited to support an H-1B petition. The Secretary of State through its consular offices that issue the visas (or another appropriate federal agency) should determine whether such a degree has been granted by a bona fide institution of higher education (authenticity) and is equivalent to college degrees obtained in the U.S.
• To assure that H-1B visas are mainly allocated for use by the most highly skilled and educated, a "carve out" beginning at 40% and increasing to at least 50% of the total number of visas should be reserved for "guest workers" possessing a master degree or higher.

7. Fraud

Current Problem:
Falsified immigration documents, bogus credentials, sham employer attestations, phony applications, forged petitions on behalf of unknowing employers, wage chiseling and other scams are just some of the litany of illegalities uncovered by investigators at four federal agencies.

Government Studies:
"The OIG [DOL Office of Inspector General] continues to identify fraud in the labor certification program, particularly in the H-1B temporary work visa program. These cases involve fraudulent petitions that are filed with DOL on behalf of fictitious companies and corporations; individuals who file petitions using the names of legitimate companies and corporations without their knowledge or permission; and increasing numbers of immigration attorneys and labor brokers who collect fees and file fraudulent applications on behalf of aliens. Based on prior investigative and audit work that found programmatic weaknesses and vulnerabilities in the program, the OIG remains concerned about the potential for increased fraud in this area." [3]

The OIG has averaged 14 indictments and 11 convictions per year for labor certification fraud over the prior [1996] five-year period." [3]

"Some aliens are themselves the petitioning employer, thereby filing petitions on their own behalf." [1]

Possible Reforms:

• Allow only the primary employer, i.e. those employers who have a specific job opening(s), to apply for an H-1B guest worker visa.
• Require employers to file electronically with the DOL key information about each H-1B hire--name, country of origin, academic degree, job title, start date, salary level. The DOL shall then make such data available on the Internet.
• H-1B workers should only be allowed admission to work full-time (40 hrs per week) not part-time.

8. Enforcement

Current Problem:
According to the DOL's own Inspector General as well as the GAO, federal enforcement mechanisms are woefully inadequate to compel employer compliance with even the weak safeguards that exist under the H-1B program that are supposedly designed to protect American workers. Penalties for violations and outright fraud are too meager to induce compliance.

Government Studies:
"Labor's [U.S. Department of Labor] limited legal authority to enforce the program's requirements and weakness in INS' program administration leave the program vulnerable to abuse. Under the law, in certifying employers' initial requests for H-1B workers, Labor is limited to ensuring that the employer's application form has no obvious errors or omissions. It does not have the authority to verify whether information provided by employers on labor conditions, such as wages is correct." [4]

"There is not sufficient assurance that INS reviews are adequate for detecting program noncompliance or abuse." [4]

"However, as the program currently operates, the goals of preventing abuse of the program * are not being achieved. Limited by law, Labor's review of the LCA [labor certification application] is perfunctory and adds little assurance that the labor conditions employers' attest to actually exist. Expanding Labor's authority to question information on the LCA would provide additional assurance that labor conditions are being met" [4]

Possible Reforms:

• Of the $1,000 visa fee charged for the H-1B visas, allocate $50 to $100 per visa issued to DOL enforcements/compliance efforts, audits and complaint/fraud investigations.
• Authorize implementation of a significant volume of compliance audits; automatic audits for employers with over certain number of guest workers.
• Centralize administration/enforcement functions in one federal agency-DOL.
• Impose both debarment and civil penalty remedies against employers found to have engaged in fraudulent activities.
• Disallow employers from appealing adverse DOL decision on the LCA to the INS.
• Impose double-back pay remedies for employers found to guilty of wage chiseling.
• Permit DOL investigations of suspected misconduct without the necessity of having to have a complaint as justification.
• For purposes of enhancing worker protections and program oversight, eliminate the H-1B impacted employers category.

Footnotes

[1] "OIG's Audit of ETA's Foreign Labor Programs Final Report" No. 06-96-002-03, US Department of Labor, 5/26/96

[2] "U.S. House of Representatives, Judiciary Subcommittee Hearing on Nonimmigrant Visa Abuse, 5/5/99

[3] "Semiannual Report of the Office of Inspector General (OIG) to the Congress" April-September 30, 2000

[4] "H1B Foreign Workers, Better Controls Needed to Help Employers and Protect Workers", U.S. Government Accounting Office, Sept. 2000

[5] "Building a Workforce for the Information Economy", National Research Council of the National Academies, October, 2000